SECURE 2.0 Highlights: Hardship Distributions and Terminal Illness
Help clients understand the new terminal illness penalty exception under IRS Notice 2024-02, including how it differs from other early distribution provisions, current limitations, tax implications, and expected regulatory updates.
- Clarifying distribution eligibility: Educate clients on how terminal illness currently qualifies for penalty-free distributions—but not as a distributable event for elective deferrals.
- Navigating plan design flexibility: Help clients explore how employer contributions may still be distributed under existing plan rules for terminal illness, even if elective deferrals are restricted.
- Preparing for regulatory changes: Advise clients on the expected technical correction to SECURE 2.0 and how future IRS regulations may impact plan administration and participant access.
Explore the pivotal changes in hardship distribution rules in this installment of our SECURE 2.0 Highlights video series. We discuss how a physician-certified terminal illness diagnosis may permit hardship distribution of deferrals. Stay informed about how these updates could affect retirement plan distributions.
For an in-depth understanding of the SECURE 2.0 Act, visit Ascensus' dedicated resource center.
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Ascensus offers comprehensive qualified and non-qualified retirement plan solutions, third-party retirement plan administration, 529 education and ABLE savings program administration, corporate- and bank-owned life insurance solutions, and fiduciary and total rewards services. The company’s brands include Ascensus; Newport, an Ascensus company; and FuturePlan by Ascensus.